Sylva First Union among branches to be sold in bank merger agreement

By Lisa Majors-Duff

But before the deal is consummated, Sylva's First Union, along with 37 other First Union and Wachovia branches in Georgia, North Carolina and Virginia, must be sold.

The U.S. Department of Justice is requiring the new company to divest 38 branches, totaling $1.503 billion in deposits, as part of the merger approval process and anti-trust guidelines. The closest Wachovia branch to be sold as part of the merger agreement is in Waynesville.

Decisions to sell First Union and Wachovia properties were made based on overlapping market shares in various communities served by both banks, First'Union spokesman Sarah Holden said. "It was necessary that one financial institution not have too much of the market share in any given community," Holden said.

"It didn't surprise me," Reg Moody Sr., a member of the local First Union board of directors since 1968, said of the decisio'. "I knew they'd close one of those banks, and the Wachovia location is much better."

The reasons for the First Union-Wachovia merger, said Moody, are image and competition. "First Union's image has not been the best in the last couple of years, hence the name, Wachovia," he said. "Secondly, they were competing for the same market, especially in North and South Carolina. They are ridding themselves of their main competition."

This said, Moody predicted the merger will be good for the company.

"I think it's a good thing," he said. "The results will be a stronger bank."

In choosing which branches to divest, the new company was required by Department of Justice guidelines to look at certain criteria, including customer convenience and which branch might be more attractive to potential buyers, Holden said.

"We are committed to finding buyers that best suit the needs of our customers, employees and communities," said Ben Jenkins, First Union vice chairman and head of general banking for the new company. "It is our intent that the employees of the affected branches will continue to be employed with the purchasing institutions and that customers will experience little or no disruption as a result of this transition."

Should an employee of an affected branch wish to pursue a new role within the new company, "we will work with that employee," Holden said. Otherwise, "we hope the employees of the affected branches will be employed by the purchasing institutions," she said. All sales will include deposits, loans and related premises and equipment. The new company, which will be called Wachovia Corp., is seeking proposals from qualified financial services institutions to purchase the branches.

"We want the customers to know that we will work with them to make sure they are transitioned seamlessly to the new institution," Holden said.

Taking another step toward the merger, First Union stockholders approved the deal at their annual meeting Tuesday. Of those shareholders voting, more than 95 percent voted for the merger, according to Ken Thompson, First Union chairman and chief executive officer.

"We are very pleased to receive this strong support from First Union shareholders," Thompson said. "We believe the Wachovia/First Union combination - the new Wachovia - will create a company that is well positioned for profitable growth.

"We have made significant progress toward completing the regulatory approval process, and we look forward to seeing the results from the Wachovia shareholder meeting later the week," he said.

Wachovia will hold its annual shareholders' meeting this Friday, Aug. 3.

At the close of the merger, the new Wachovia Corp. will have 19 million customers. With total assets of $324 billion and a market capitalization of $45 billion, the company will be the largest financial holding company in the Southeast region and the fourth largest nation'wide. The company will be headquartered in Charlotte.

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